Xbox goes handheld with Argo?

If speculation and subsequent denials concerning the prospect of a Microsoft handheld device weren't enough to keep us news writers churning out the speculation, we now hear chatter of an entire range of 'digital media products'. This latest news reportedly comes from an insider source, close to the secretive Microsoft handheld project, who reportedly told the Seattle Times of a range of Xbox-branded products. 'Argo' is apparently the codename currently being used, and the insider speaks of media products designed not only to compete with Apple's iPod, but the Nintendo DS and the Sony PSP too.

The line of products is rumoured to be headed by one of the Xbox's founding-fathers, J Allard, and rumours have been rife for months that the executive is leading Redmond's handheld charge. A previous Bloomberg report pointed to releases in the range this very Christmas, with MS looking to up revenues this year after Windows Vista slipped. If true, could we hear more on this at X06 in September? Here's hoping...